Answered: 3. How much should be invested in a…

3. How much should be invested in a fund each year paying 3% compounded semi-annually to accumulate Php. 150,000 in 6 years?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 9P

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

No.3. Step by step solution, I do not understand excel

1. Mr. Moreno started to deposit Php. 5,500 quarterly in a fund
that pays 2.5% compounded monthly. How much will be in the
fund after 6 years?
2. The buyer of a lot pays Php. 50,000 cash and Php. 14,500 every
month for 10 years. If money is 8% compounded annually, how
much is the cash value of the lot?
3. How much should be invested in a fund each year paying 3%
compounded semi-annually to accumulate Php. 150,000 in 6
years?
4. A high school student would like to save Php. 60,000 for his
graduation. How much should he deposit in a savings account
every 3 months for 6 years if interest rate is a 0.25%
compounded monthly?
5. A television (TV) set is for sale at Php. 13,499 in cash or on
installment terms, Php. 2,599 each month for the next 6 months
at 8.9% compounded quarterly. If you were the buyer, what
would you prefer, cash or installment?

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